Wednesday, January 12, 2011

Economists remain upbeat despite investment fall

Tuesday, 11 January 2011
Chun Sophal
The Phnom Penh Post

Investment approved by the Council for the Development of Cambodia dropped some 54 percent in 2010, compared with the previous year, but experts believe the decline is not indicative of the Kingdom’s ongoing economic recovery.

Approved projects were worth some US$2.69 billion in 2010, a steep decline from 2009’s $5.86 billion, figures obtained Tuesday show.

Asian Development Bank senior country economist Peter Brimble said late Tuesday it was important to take “lumps” into account, noting a multi-billion dollar island development project approved in 2009 had distorted the figures.

“I certainly do not feel there was a decline of that magnitude [in the Kingdom’s economy],” he said. “We [the ADB] feel there is an economy recovery in 2010.”


The largest approval this year was the proposed new Siem Reap airport project, said to be worth near $1 billion.

Cambodia Institute for Development Study president Kang Chandaroth said that despite the fall, the large amounts of approved foreign investment in the Kingdom proved it was becoming a reliable country for business.

“We expect inflows of foreign investment capital will keep increasing this year and in other years because both Cambodian and the global economic situations are performing better,” he said.

CDC deputy secretary general Duy Thov said that although 2010’s pledged investment was less than in 2009, the inflow of foreign-based capital investment had increased.

In 2009, foreign pledges accounted for around $2.10 billion dollars, compared to $2.29 billion in 2010.

The figures do reveal some trends regarding investment by country and by sector, such as South Korea’s relative strength during 2010, according to Brimble.

He added that levels of foreign direct investment were often a better indicator of relative economic strength. FDI in the first three quarters of 2010 already exceeded all of 2009, he added.

Two more projects were approved in 2010 compared with 2009, with 74 of the 102 approvals being in industry, 23 in agriculture, three in tourism and two in services.

Approvals had topped $10 billion in 2008, before falling to $5.86 billion in 2009.

The CDC also noted the figures’ shortcomings, claiming it was important to look at multiple sets of data before coming to a conclusion on the state of the economy.

ADDITIONAL REPORTING BY JEREMY MULLINS

8 comments:

khmerbotra said...

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Anonymous said...

Economy base on import exceed export, spending spree on foreign goods, lack of diversification. Profit made by foreigner sifted to foreign country. lack of jobs creation for indiviual Khmer, jobs created for company only. lack of expertist and resources for promtion of Khmer product. So economy recover very slow compare to neightbouring country.

Anonymous said...

wow business in Cambodia are in the billions congrat to Hun Sen...
But where did all this $ goes?
Why is Khmer people still poorer and poorer?

Did the money $ from business goes to Hun Sen or Vietnam as part of Jan 7th?

Anonymous said...

As currently even with more than $2.5 earned per day (over the poverty line), it is still not enough for daily expense at the least while the costs of consuming goods especially those for the basic needs like foods, medicines, petrol/gasoline/fuel and household materials are swelling day by day without any price control or intervention, and this leads to no hope that they will plunk down or be vaguely receding even after the economical recovery according to our analysis. This case becomes a historical tendency for which all of domestic businesspeople still enjoy greater benefits over the advantage of economic crisis although with or without taxation due to their relationship with the government when all of those obligations and duties are settled with the end users, who are earning a living just for a living. MKZ, Phnom Penh, Cambodia

Anonymous said...

With fixed or reduced rate of household incomes, smaller percentage of savings or no savings at all but amplifying expenditures due to such soaring prices of goods influenced by inflation and other economical factors and in order to meet their limited consumptions, many grassroots come out either hunting for jobs or taking risk in various businesses where too many existing small and medium merchants already survive in difficulties thus leads to lesser sharing revenues among them but not the big-business dominators like Oknhas (or noblemen) and big foreign-capital investors which cover almost 65% to 85% both local and foreign market revenues. MKZ, Phnom Penh, Cambodia

Anonymous said...

We, poor Cambodians, are faintly proud of ourselves that we will have 555-mettre building, the highest one in Asia but worried if we still have lands in our own hands to run our own business for our own benefits to contribute to our own national economic growth if not much but just less step by step to the best we can along with FDIs when we are not able in the initiative stage. We prefer not to go and work overseas for capital inflows or to be just employees for FDIs for 99 years to increase GDP but for the big benefit of foreign richer countries. Our everyday problem is whether we have enough money for foods and medicine first. I do believe this does happen not only in Cambodia but also in other developing countries. The lessons on Economic Growth are already provided in National Development Strategy of Ministry of Planning.

While almost 35% of 14 million people are living under the poverty line (less than $1 per day) and roughly 40% on the poverty line or slightly over it that most of them are in the remote areas, outside the city-towns and in the outskirts of capital city nationwide according to the study of our university research team, we are not so much proud of such emerged mini-tiger economic recognition reported by Swiss banking giant UBS. MKZ, Phnom Penh, Cambodia

Anonymous said...

CHINA and INDIA! save the world econony! What the idiot stupid notion you get from HUN XEN?

If you stupid stay quite! "Cambodia economy not affected by the world crises" Do you remember your stupid speach? AH KwacK?

The whole country try to follow ah Kwack fated?